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PIC says critics should focus on stellar returns

The Public Investment Corporation (PIC) says its critics are focusing on a few underperforming investments, instead of highlighting the returns it has generated for clients.

The PIC, Africa’s largest asset manager, has funds under management of about R2.1-trillion, which it invests on behalf of the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund and the Compensation Fund.

The corporation came under fire recently for the investment it was about to make in Iqbal Surve’s Sagarmatha Technologies, which it aborted at the 11th hour, as well as the investments it has made over a number of years in Ayo Technology Solutions (29% for R4bn).

It is also invested in VBS Mutual Bank, which is now under curatorship, to the tune of R108m in equity plus a R350m revolving credit facility; $270m in the now bankrupt Nigerian oil and gas company Erin Energy (30%); R16bn in troubled global retailer Steinhoff (8.1%); Independent Media SA (R1.3bn in loans and preference shares) and Mobile Specialised Technologies (loan of R21m).

In a statement on Wednesday the PIC rebutted its critics by pointing to the fact that its listed equity portfolio (about 70% of the total) had consistently outperformed the JSE Swix all share index (ALSI).

In the year to end-March 2018 total assets under management grew 8.6%, or by over R165bn. The PIC also has an unlisted portfolio in the Isibaya Fund, which has about R140bn under management.

"The recent media focus has almost exclusively been on a small number of underperforming investments and it seems the intention is to drive a message that funds under the PIC’s management are at a danger of being eroded or that the PIC has underperformed as an asset manager. Neither is correct," PIC spokesman Sekgoela Sekgoela said.

The PIC defended its 30% investment in Harith General Partners and 46% shareholding in Harith Fund Manager. Harith was established in 2006 to raise domestic financial resources to invest in infrastructure. These investment were made by PIC Corporate, an internal operations fund, not with money from any of its clients. "There is nothing untoward in the commercial relationship between the PIC and Harith. The portfolio is performing very well," the PIC said.

Sekgoela also denied that it had played any role in engineering the collapse of VBS. He said the PIC planned to oppose the high court application by United Democratic Movement leader Bantu Holomisa for the suspension of its CEO, Dan Matjila, ahead of a disciplinary process.

Earlier in July Holomisa brought an urgent application in the High Court in Pretoria for the suspension of Matjila, who has denied allegations that were probed by the PIC board.